‘Longevity tsunami’ will swamp health budget

Public systems and private insurers will refuse to cover advanced cancer treatments as Australia copes with a ­“longevity tsunami", actuaries warn.

A paper to be presented at the Actuaries Summit in Sydney this week, by Associate Professor
Anthony Lowe
and
Sophie Dyson
, argues that treatments that may extend the life of a cancer ­sufferer are valued more highly than other public health interventions that may produce more healthy years of life.

“In the case of new drugs for advanced (metastatic) cancer, many are at, or beyond, the limit of what is considered affordable by health eco­nomists and health policy makers," the authors say.

The paper cites projections that the number of cancer diagnoses in ­Australia will rise to 150,000 a year by 2020.

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One suggestion is that the ill and their families will have to pay out of their pockets, which will become a challenge for those over 50.

Cancer is 14 times more common in that age group than those under 50, which will mean they are more likely to have to use savings and superannuation to pay the cost.

“The projected increase in cancer treatment costs is likely to place a huge additional burden on Australia’s retirement incomes system," the paper says.

Associate Professor Lowe and Ms Dyson contrasted expenditure of $161,000 on drugs to extend the life of one colorectal cancer sufferer, with expenditure on the Gardasil vaccine, which is designed to prevent some types of cancer.

The colorectal drugs were expected to extend life for a median 64 weeks, while the same amount spent on the vaccine would cover 360 young people.

It’s challenging choices like these over health spending that will become more urgent as the healthcare bill continues to mount.

In a 2010 paper that accompanied the federal government’s health and hospitals network policy, health spending was estimated to top 26 per cent of all Commonwealth spending (7.1 per cent of GDP) by 2050.There was criticism of federal government cuts to health spending in the recent budget. Australian Medical Association president Steve Hambleton said the government was “getting sick people to help fill the budget black hole".